A new Center for Governmental Research study has shown that unless changes are made, county-owned nursing facilities may not survive.
In a statewide study recently released, CGR found 92 percent of county-owned nursing homes outside New York City lost money in 2010. Additionally, the study determined without significant changes in how the homes operate, most have little chance to survive.
According to Donald Pryor, Ph.D., study director and CGR director of Human Services Analysis, in recent years six counties have sold or closed their homes, with mixed results ranging from improvements in care to state closure of one poorly performing home.
Of the 33 counties outside New York City operating nursing homes as of January 2013, CGR found eight are in the process of selling them, while at least five more indicate they are actively considering selling.
“The study underscores that counties outside NYC with financially struggling nursing homes – and that includes almost all counties with such homes – must do thorough due diligence,” Pryor said. “We recommend assessing a range of options, from determining if there are ways of reducing internal costs and enhancing revenues, to weighing the potential for selling the home, and if so, carefully considering to whom and under what conditions.”
Chautauqua County is among those which have been discussing whether to sell its county-owned home. County Executive Greg Edwards cited the CGR report, and emphasized the county must sell the Chautauqua County Home.
“They proved over 90 percent of the county homes are losing money,” Edwards said. “They have proved that there’s approximately 33 that remain county-owned, and 13 of those are under active management for sale and transition. We are one of those 13. They also confirmed that you cannot continue to operate a county home as we have, as every other county has, and expect to be actually successful. It’s not like we have a bad facility, or bad employees, or bad management, or a bad location. We have some of the best of all of those. The issue is, the dollars are not there to operate a county home by a county without losing substantial sums of money.”
DOES CGR HOLD UP?
Edwards, along with Democrat Ron Johnson and Republican Vince Horrigan – who are both vying for the county executive seat – all agree the CGR report addresses some key points.
As current county executive, Edwards said he responded to a survey from CGR sent to counties owning county homes, answering each question in regard to Chautauqua County’s home.
“I believe that it was an exhaustive survey, and I believe it was certainly accurate with regard to its analysis of the Chautauqua County Home,” Edwards said.
Horrigan, who is currently serving as a legislator for Chautauqua County, has been in the midst of County Home negotiations this year, as three offers have been addressed. He has repeatedly expressed he is in favor of selling the home, and has visited facilities owned by the last two potential purchasers who expressed interest in the County Home.
“This report reconfirms what we found from our Chautauqua County Home CGR study,” Horrigan said. “The restrictions placed on government-owned nursing homes make them unsustainable without significant taxpayer subsidies. My conversations with several NYS county elected leaders, nursing home operators, and county leaders across the United States all confirm the report’s findings that ‘for county-owned homes, the future is especially troubling.’ This report clearly states that our situation is not unique to Chautauqua County.”
Being in the nursing home business, Johnson has a different take on the report.
“The Center for Governmental Research identified that nearly 10 percent of all New York state county-owned nursing homes were in the black in 2010. The report points out quite correctly, ‘…without significant changes in how they operate, most (county-owned nursing homes in NYS) have little chance to survive,'” Johnson said. “In our county, we had the best of the best with our Dunkirk county home. What happened to our once treasured asset? I am in lock step with the CGR report and I agree that we need to do our due diligence and assess all of our options including reducing our internal costs and enhancing our revenues. Selling the County Home for less than its true value is wrong headed. As a businessman who makes money in this field, I promise that I will turn the County Home around. My background is in turning around troubled facilities. I do appreciate the CGR report and do value the recommendations contained within the report.”
A 2007 CGR study regarding county-owned nursing homes found the future of county homes was beginning to be endangered by increasing costs and reimbursement levels that failed to cover those costs. This resulted in increases in operating losses, accompanied by the need for increasing county subsidies.
According to the new report, since then, those initial warning signs have become a clear, unmistakable trend in virtually all remaining county nursing homes.
“By law, NYS county-owned nursing homes are prevented from providing a continuum of health care services which includes the appropriate modality of care for the residents such as assisted living or adult living options,” Horrigan said. “This restriction contributes to longer says in county-run nursing homes. One of the contributing factors to lower reimbursement rates may stem from the fact that government run nursing homes have taxpayer subsidies to make up for shortfalls in the case management index for reimbursement.”
The CGR report showed that on a per-facility basis, new admissions in county homes are consistently lower than in for-profit and nonprofit facilities. According to the report, such lower admission totals in county homes occur consistently, despite the significantly higher numbers of beds in the typical county-owned nursing facility.
Additionally, the report said residents in county homes typically stay longer for care than they do in non-county homes. And, because less admissions to county homes come from hospitals, the report shows negative financial implications for county homes start at admission intake.
“Now, because county homes can only do skilled nursing, that leads to the scenario where there are more people in skilled nursing in county homes than should be,” Edwards said. “They don’t have alternatives of care, where they can move folks who, maybe for a short period of time, need skilled nursing, into assisted living or independent living. They are restricted to having only one kind of care, and that is the most restricted care. It limits the quality of care we can provide and the options we can provide, and is a major flaw in the county nursing home business.”
Chronic conditions and diseases – including depression, hypertension, diabetes mellitus and anxiety disorders – are also increasing in all nursing home patients across New York state. However, according to CGR, county homes have consistently been 3 or 4 percentage points higher than their counterparts when it comes to patients with dementia and Alzheimer’s.
County homes are also serving “hard-to-place” residents more than their counterparts. The report said the typical county nursing home indicated that about 15 percent of its current residents should be considered “hard to place,” and about 40 percent estimated the total could be 20 percent or more of all residents. The report indicated many concerns were expressed concerning what would happen to such individuals if the county home were sold.
“The mission of the County Home has always been to provide services to those residents of the county who were unable, for any number of reasons, to care for themselves,” Johnson said. “The County Home traditionally accepts and retains residents who have no other alternative for care. In the present debate concerning privatization, the fact remains that these ‘hard-to-place’ residents need to be considered too. Even faced with the task of having to provide in one way or another for our county seniors who can’t take care of themselves, I am confident that we can reverse the mismanagement and working together with our labor partners return our County Home to profitability.”
However, the report also determined that although county homes are perceived by many as providing a ‘safety net’ function of serving the hard to place residents, it is hard to definitively prove that county facilities are more likely to admit such individuals. Currently, there is no known data that objectively enables the comparison to be made.
“The important part is there is no evidence whatsoever that county homes have the ‘hard to place’ residents,” Edwards said. “There just wasn’t any documentation to demonstrate that. I think what was even more telling was that 89 percent of people in long-term care in New York state are not in county homes. So, that, for me, really tells the story. And, from all the other analysis, the care is just as good, benchmarked analysis, in non-county homes as county homes. The real issue is, only 11 percent of the population is in county homes.”
The study determined that county homes are typically disadvantaged from their counterparts, because they generally receive lower levels of reimbursement. However, the homes also have the potential for higher costs due to the higher staff time needed to provide added attention demanded by many of the “low-acuity-high-behavioral-need” residents.
Although counties cannot offer programs outside of skilled nursing care, Johnson suggested the county support outside assisted living programs.
“The county can support assisted living with just a little help,” Johnson said. “Then, the whole system begins to work. … We need to know when a person is going to come into the system, what resources are available to them, and how they’re going to be worked through the system – especially people who don’t have their own resources. We can do that very nicely. And, if the county supported ALPs, we would have some new ALPs being built, we would have jobs, we would have construction. We’re sitting on our hands like we do everything over the last seven or eight years.”